M5 – Benefits of Systems

Michael Gerber said in his book the E-myth, that you can’t get your 17-year-old son to clean up his room, or wash his own laundry, but McDonald’s can get him to serve lunch to 1000 people.

That’s the benefits of systems. Systems allow you to create simple processes that enable unskilled, or low skilled employees to perform complicated tasks at a high level.

Here’s the definition:

A system is a set of interrelated steps that work together in a predetermined manner to achieve a specific result. Effective business systems are the best known way of getting results that are consistent, measurable and which ultimately benefit customers.

Everything you do is a system. Whether you have them documented are not, doesn’t matter, you’re using a system. Systems can be very effective, or extremely ineffective. The difference between the two is the documentation, the measurement, and the optimization of the systems.

It’s obvious which businesses don’t have documented systems. They are the ones who fly by the seat of their pants, have high employee turnover, have high defects, and returns, and seemed to be disorganized, and unreliable.

Some businesses, however, have learned how to get better results by creating checklists, and documenting some processes. These businesses appear professional, and don’t have as many issues, or returns as businesses with undocumented systems.

The highest level of businesses, the McDonald’s, and the Walmarts of the world, have fully documented systems for every aspect of their business. They consistently take ownership of each process, set up ways to measure those processes, and optimize those processes. These businesses have systems in place to duplicate results and create a franchise.

If you want to create a business that successful, you must create systems that ensure your success.